Stocks drop on new oil record

NEW YORK -- Wall Street resumed its sell-off Wednesday after oil hit a new record and a bearish analyst report renewed concerns that General Motors Corp. could run out of cash.

The stock market's pullback, which accelerated in the final hours of the week's last full trading day, left the Dow Jones industrial average officially in bear market territory, with the blue chips having fallen more than 20 percent from their October highs.

Oil surged to new records above $144 a barrel as the government reported a bigger-than-expected drop in U.S. supplies and as investors worried about tensions in the Middle East.

Worries that GM could go so far as to declare bankruptcy only added to investors' unease. The stock fell $1.77, or 15 percent, to $9.98 -- the first close below $10 since September 1954 when Dwight Eisenhower was president. Investors shrugged off better-than-expected sales figures from June and fretted about the company's cash needs.

According to preliminary calculations, the Dow fell 166.75, or 1.46 percent, to 11,215.51, the lowest close since August 2006.

Gasoline prices hit a fresh high ahead of the July 4th holiday weekend, increasing half a penny overnight to $4.092 a gallon.